The USA PPP Payment Mechanisms: A Comparison to the Canadian PPP Systems

摘要

Over the years, PPPs in the USA have used different types of payments to compensate project developers. In the past decades, the dominant type was toll payment. Availability payments started to gain more popularity with performance-based PPP contracts. Internationally, some other payment types are also used in PPPs, such as operation and maintenance payment, safety payment, satisfaction payment, and end of term payment. A payment mechanism is a package that includes a set of payment type(s), performance measures, performance specifications, and penalties for not meeting the specifications. Since PPP payment mechanisms, other than toll payments, is new in the USA, it is not clear whether payment mechanisms as used in the USA projects would be similar to those used in the PPP international market regarding the payment types, payment structure, performance measures and specifications, penalties, and deduction schemes. This research investigated the payment mechanisms in transportation PPP projects in the USA and Canada. Comparative and content analyses of project agreements are used as research methods. The findings show that PPP projects in the USA tend to have payment mechanisms of fewer payment types, less sophisticated payment calculations, and less complex deduction schemes. Public agencies would use the outcome of this research to revisit and improve the design of payment mechanisms of their PPP projects.